Over the weekend, the project developer of privacy-centric cryptocurrency ZenCash (ZEN) confirmed that the project has become the recent altcoin to suffer a 51 percent attack.
In an official statement, a spiteful miner was able to conduct the attack including at least three double spends against the cryptocurrency’s network on June 2.
To carry out a 51 percent attack, an attacker must have a majority of a cryptocurrency network’s overall hashrate, which makes it possible for them to restructure the blockchain and make it accept fake blocks.
Usually, an attacker will monetize a 51 percent attack through a double spend attack. This is made possible by putting coins at a cryptocurrency exchange while also signing a transaction that sends the same coins to a wallet in their control. Once the exchange credits their account with the funds, they filter them into bitcoin or another cryptocurrency and move those funds to an external wallet.
In the interim, the attacker uses their majority hashpower to mine a fork of the main blockchain that rapidly increases longer than the one approved by the network. This makes it possible for them to change the transaction that initially deposited their coins at the exchange and rather transfer the funds to another wallet in their possession.
After filtering the funds, the attackers restructure the official blockchain by forcing it to adopt the longer fork, which has more stored Proof-of-Work (PoW). This results in the funds to go missing from the exchange’s wallet and rather appear in the attacker’s wallet.
In this instance, the attacker carried out at least three double spends. In total, the attacker went away with over 23,152 ZEN from these attacks, which is valued at $700,000. During the time of the attack.